The Department of Financial Services (DFS) under the Ministry of Finance (MoF) raised the limit of Mudra loan amount under the Pradhan Mantri Mudra Yojana (PMMY) from current Rs 10 lakh to Rs 20 lakh under new “Tarun Plus” category to promote entrepreneurship in the country. It will effect from October 24, 2024.
- Borrowers who have previously availed and successfully repaid loans under “Tarun” category will be able to access funding between Rs 10 lakh and Rs 20 lakh.
- Also, the Credit Guarantee Fund for Micro Units (CGFMU) will now offer guarantee coverage for these enhance loans, which reinforces the Government of India (GoI)’s commitment to promote a robust entrepreneurial ecosystem in India.
Note: In July 2024, Union Minister Nirmala Sitharaman, MoF made this announcement in the Union Budget for Financial Year 2024-25 (FY25).
About PMMY:
i.PMMY was launched on 8th April, 2015 by Prime Minister (PM) Narendra Modi in New Delhi, Delhi.
- Aim: To facilitate easy collateral-free micro-credit of up to Rs 10 lakh to non-farm small and micro-entrepreneurs for income-generating activities.
Note: The acronym of “MUDRA” is Micro Units Development and Refinance Agency Limited, which is a financial institution, established by the Government of India (GoI) under PMMY for development and refinancing micro unit enterprises.
ii.Under PMMY, loans are provided by Member Lending Institutions (MLIs) such as Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) among others.
iii.Now, MUDRA loans are classified into 4 main categories namely, Shishu, Kihore, Tarun and newly introduced category “Tarun Plus”. Loan limit for these categories are:
- Shishu: covering loans of maximum Rs 50,000.
- Kishore: covering loans above Rs 50,000 and up to Rs 5 lakhs.
- Tarun: covering loans above Rs 5 lakh and up to Rs 10 lakhs.
- Tarun Plus: covering loans of Rs 10 lakh and up to Rs 20 lakh.
iv.Monitoring of PMMY progress will be conducted at the State level through the State Level Bankers’ Committee (SLBC) forum, and at the National level by MUDRA/Department of Financial Services, GoI.
- MUDRA has created a portal for this purpose, where Banks and other lending institutions can input their achievement details directly.
Key Achievements of PMMY:
i.As of June 2024, Under PMMY, around 487.8 million cumulative loans amounting to Rs 29.79 trillion have been sanctioned since the inception of scheme in 2015.
ii.According to GoI data, 66.8 million loans were sanctioned under PMMY in FY24, amounting to Rs 5.4 trillion.
iii.As per the MoF, Non-Performing Assets (NPA) of Public Sector Banks (PSBs) in Mudra loans have declined from 4.89% (FY20) and 4.77% (FY21) to 3.4% in (FY24).
Recent Related News:
The Union Cabinet approved the proposal of Department of Rural Development(DoRD) under the Ministry of Rural Development(MoRD) for the implementation of Pradhan Mantri Gram Sadak Yojana-IV (PMGSYIV) for the Fiscal Years (FY) 2024-25 to 2028-29, with a total outlay of Rs 70,125 crore.
- The scheme aims to provide 62,500 kilometer (km) of all-weather roads, connecting 25,000 unconnected habitations across various regions, including plains, hill states, and special category areas.
About Ministry of Finance (MoF):
Union Minister- Nirmala Sitharaman (Rajya Sabha- Karnataka)
Minister of State (MoS)- Pankaj Chaudhary (Constituency- Maharajganj, Uttar Pradesh, UP)
